CMT – BT

CapitaMall Trust posts steady Q3 results

Addition of Clarke Quay in July helps boost revenue 6%

CAPITAMALL Trust (CMT) delivered steady results for the third quarter ended Sept 30, supported by higher rents at its malls and contributions from a property bought in July.

CMT yesterday posted a gross revenue of $148.2 million, which is 6 per cent higher than that a year ago. The bulk of the increase came from Clarke Quay, which CMT bought on July 1.

Higher rental rates for new and renewed leases at other malls contributed to the rest of the increase. The average rental growth rate across CMT’s portfolio from January to September, on a compounded annual basis, was 2.1 per cent. This exceeded the 0.8 per cent for the financial year ended Dec 31, 2009.

‘Growing tourist arrivals, supportive domestic demand and the resultant pick-up in consumer confidence will ensure that the retail market remain positive for the rest of the year,’ said James Koh, chairman of CMT’s manager. CMT’s distributable income to unitholders was $75.2 million, inching up 0.3 per cent from last year. Distribution per unit (DPU) was 2.36 cents, also up 0.3 per cent. The DPU ‘was in line with consensus and our estimates’, said Standard Chartered analysts Regina Lim and Wong Yan Ling in a note. Unitholders can expect to receive the Q3 DPU on Nov 29.

The annualised DPU was 9.36 cents. Based on CMT’s closing price of $2.02 yesterday, the annualised distribution yield works out to 4.6 per cent.

The occupancy rate of CMT’s portfolio was 99.6 per cent as at Sept 30, slipping slightly from the 99.8 per cent as at Dec 31 last year. CMT said that acquisitions, asset enhancements and participation in development projects are some ways in which it will try to grow its DPU.

‘CMT now has $840 million of cash and can invest $1.28 billion in assets before reaching 40 per cent gearing,’ Ms Lim and Ms Wong wrote. Its gearing ratio was 37.2 per cent as at Sept 30, up from 34.8 per cent three months ago. ‘We think management will seek development projects as these provide yield on cost of 6-6.5 per cent compared with typical acquisition yield of 5-5.5 per cent,’ they said.